Foreign investments in Singapore

It is no secret that there's lots of foreign investment in Singapore, but locals and foreign investors see Singapore differently. Locals live in Singapore, have families here, so many things are considered in their lives for living, comfort, security, etc. Foreign investors look at Singapore as an economic entity. This article gives a run down on how Singapore is viewed from their stance. It isn't a bad place at all.

Cheers!


http://www.theglobeandmail.com/repo...a-rich-properties-hit-bottom/article24215308/

Global Property

Singapore slowdown: Have ultra-rich properties hit bottom?

GAIL JOHNSON

Special to The Globe and Mail
Published Tuesday, May. 19 2015, 1:08 PM EDT
Last updated Wednesday, May. 20 2015, 12:28 PM EDT

Drawn by its glittering downtown core and luxury condominiums, villas and resorts, the ultra-rich have flocked to the city-state of Singapore.
Now, a host of government cooling measures have dampened the residential property market, with many discouraged by a sales tax of 18 per cent for most foreigners.
An influx of money started pouring into the region in the mid-2000s as the government pitched itself as a global financial and banking hub and loosened rules for foreign buyers. Developers took note, changing the downtown skyline and building luxury properties, particularly on the tiny island of Sentosa, a former British military base just off Singapore’s main island.
Former professional footballer David Beckham, actors Jackie Chan and Jet Li, Australian mining heiress Gina Rinehart, and Brazil’s Eduardo Luiz Saverin, a co-founder of Facebook, are among the ultra-rich who have invested in property in Singapore – property that is worth a lot less now.
According to Colliers International, some homes, particularly high-end properties, are selling by as much as 20 to 30 per cent below the peak prices in 2007-08.

“The market in Singapore has been soft for a while now, in the past 24 months,” says Nicholas Holt, head of research, Asia Pacific, for international real estate firm Knight Frank.
“We saw, in the prime end of the market, prices came down pretty steeply last year. It paints a bit of a gloomy picture … but it’s not a cyclical downturn but very much a government-induced slowdown.”
The years of accelerated growth have led to income inequality, rising living and housing costs, and the discontent of many Singapore citizens. The People’s Action Party – which has been in power since Singapore’s independence from Malaysia in 1965 – began taking steps to reduce foreign investment after the 2011 general election.
Among the measures to cool the housing market, and stop prices from appreciating, is the Additional Buyer’s Stamp Duty (ABSD). Introduced in 2011 at 10 per cent of a property’s purchase price, it was increased two years later to 15 per cent.
“The ABSD has cooled off a lot of interest from foreign buyers,” Mr. Holt says. “There are exemptions to the ABSD, but Canada is not one of them. U.S. citizens don’t have to pay 15 per cent. Nor do Swiss, Norwegians, or purchasers from Iceland or Lichtenstein…. Plus there’s the standard Buyer’s Stamp Duty, which is approximately 3 per cent. So you’re actually paying 18 per cent on the purchase price, which is a lot.”
Aside from Hong Kong, Singapore is now the most costly place in Asia-Pacific for a foreigner to invest in real estate, according to new research from Knight Frank. However, signs of a downturn are everywhere. According to the 2015 Knight Frank Wealth Report’s Prime International Residential Index, which tracks the change in price of prime residential property in 100 cities around the world, Singapore came in 98th in terms of performance for 2014 at -12.4 per cent

“This is partly due to the rock-bottom interest-rate environment we’ve had the last few years,” Mr. Holt adds. “Because the Singapore dollar is loosely pegged to the U.S. dollar, we import the interest rate from the U.S., and that’s led to a lot of money going into property.
“We’re seeing …policy makers around the world becoming more active, more protectionist, not only with new taxes but also with new restrictions … to make sure mistakes that were made in pre-crisis boom aren’t made again.”
Alan Cheong, senior director of research and consultancy in Singapore for Savills, a global real-estate company, says it’s “guesswork” to determine whether any of the cooling measures will be lifted any time soon.
“Given Singapore’s open economy, we do not have an interest-rate policy, which meant the interest-rate tool to contain inflation is absent. Therefore, administrative and taxation measures had to be implemented to prevent the market from running too far ahead of itself.”
However, Mr. Cheong says there are plenty of buyers just waiting to jump in now that the market appears to be hitting the bottom.
The residential market last year was characterized by fewer project launches, low sales volume, and resistant prices, Savills research has found. Primary market sales in 2014 were about half that of the year before.
Prices in the private residential market are expected to drop about 7.5 per cent this year, Savills states in its January residential sales briefing. Demand may start to build again among longer-term investors in particular.

“With potential rising interest rates, potential new supply coming in, and the potential easing of cooling measures, the market is potentially coming near the bottom, so it could be an opportunity,” Mr. Holt says. “There are buyers sitting on the sidelines.
Meanwhile, supply will increase: Six sites that are part of the 2015 Government Land Sale Programme will yield an estimated 2,530 new private homes.
“The long-term story for Singapore is still very positive,” Mr. Holt says. “It has a high standard of living and fantastic infrastructure. It’s clean, it’s safe, it’s very well connected to the world; it has a diverse, multinational population. It has everything going for it. It’s an island, so there’s limited land. Long-term, I believe it’s a place where the market will continue to perform well.”

many sinkies don't understand that property is a liability rather an asset unless you have millions to park your money, there is no one way up, as the saying anything that goes up have to come down, applies to all price tags.

do you agree?

Returns ok but need to have Hugh investment. Must have more than $1m then can play!

Hmmm, actually, I am kind of backward, or should I say, out of touch with properties and their trends. If I look for a place, I do not, as most people do, consider resale value, market trends, etc. I would see how the neighbours are, would it be a place where I could make friends, will they accept my dog, habits, lifestyle, etc. To me, it is not whether the place is big, or small, but who lives next door that is more important. Of course, affordability is the most important aspect in the decision process, but that can be quickly arrived at as to whether able to afford or not. Also of importance is commuting distance to work, children's school, markets, hospitals, etc. In a city, these amenities will be within reach easily, but may not be so in rural areas (not applicable to Singapore). As with most other things in life, money helps. Price fluctuations, nothing you or me can do about it, just got to go with the flow.

Hope that answers your question. I would not speculate on profiteering from my primary residence, but if I am in the position for a second property, I suppose I might.

Cheers!

dancingshoes said:

many sinkies don't understand that property is a liability rather an asset unless you have millions to park your money, there is no one way up, as the saying anything that goes up have to come down, applies to all price tags.

do you agree?

Click to expand...

dancingshoes said:

many sinkies don't understand that property is a liability rather an asset unless you have millions to park your money, there is no one way up, as the saying anything that goes up have to come down, applies to all price tags.

do you agree?

Click to expand...

In Sillypore majority of the sinkies don't own any asset as they in reality belongs to either the bank or gahbrament.
We are in fact just renting our HDB flats and cars from them for our usage at an exorbitant rate.
Most sinkies don't really understand the real meaning of owning something.

Agoraphobic said:

Hmmm, actually, I am kind of backward, or should I say, out of touch with properties and their trends. If I look for a place, I do not, as most people do, consider resale value, market trends, etc. I would see how the neighbours are, would it be a place where I could make friends, will they accept my dog, habits, lifestyle, etc. To me, it is not whether the place is big, or small, but who lives next door that is more important. Of course, affordability is the most important aspect in the decision process, but that can be quickly arrived at as to whether able to afford or not. Also of importance is commuting distance to work, children's school, markets, hospitals, etc. In a city, these amenities will be within reach easily, but may not be so in rural areas (not applicable to Singapore). As with most other things in life, money helps. Price fluctuations, nothing you or me can do about it, just got to go with the flow.

Hope that answers your question. I would not speculate on profiteering from my primary residence, but if I am in the position for a second property, I suppose I might.

Cheers!

Click to expand...

U buy based on who lives next door??? What happens u shift in and they shift out!!

To be more accurate, it is important for me to have friendly, hospitable neighbours for me to settle down in what I'd call home. We can't control anybody's movements, and people may have to move for different reasons. It is nicer to have neighbours that are helpful and trusting, than complete strangers, one who would let you know if you left the lights in the car on, or left some belonging outside in the yard and they do not steal it. So far, I've been lucky to have nice neighbours everywhere I lived. Don't have an answer to your question, just that if it happens, hope the next person that moves in will not be an asshole.

Cheers!

enterprise2 said:

U buy based on who lives next door??? What happens u shift in and they shift out!!

Click to expand...

dancingshoes said:

many sinkies don't understand that property is a liability rather an asset unless you have millions to park your money, there is no one way up, as the saying anything that goes up have to come down, applies to all price tags.

do you agree?

Click to expand...

The PAP noes tis very well thats why they price their pigeon hole way abv its value. Look at the map, 80% of the land in Singapore owned by SLA. What alternative you hve, rent a flat or house, the rental will kill you.